According to the Q1 2016 Digital Marketing Report, recently released by Merkle, Google search ads continued to deliver strong performance in Q1 2016, as the renewed wave of mobile growth that
kicked off in late 2015 remains the key driver of year-over-year Google trends. In Q3 2015, Google began showing more ads at the top of phone results, helping its rate of mobile click growth
more than double. This influx of mobile ad volume is driving average cost per click (CPC) lower and cannibalizing organic search visits, but it is ultimately propelling Google search
spending to a six-quarter high.
Google Shopping Ads, also known as Product Listing Ads (PLAs), have been another bright spot for Google with growth significantly outpacing text ads.
PLAs are benefiting from robust increases in mobile volume, in part due to a larger format introduced last year, as well as a spike in traffic from Google search partner sites, which include
Google’s own image search property.
On the organic search side, the report finds traffic levels suffering as a result of Google’s increased monetization of the mobile search
engine results page, and changes Google made in late 2015 to the display of its local pack map results. All told, organic search visits from phones fell Y/Y in Q1, for the first time in the
history of this report.
- Spending on Google paid search ads rose 25% Y/Y in Q1 2016, as clicks increased 33% and CPCs fell 6%. Google Shopping Ads spending
was up 41%, while text ad spending increased 13%.
- Advertiser spending across Bing Ads and Yahoo Gemini combined was down 10% Y/Y, with clicks falling 14% and CPCs rising 4%. The
two platforms have seen their share of paid search clicks fall 4% overall in the past year and 9% on phones.
- Phones and tablets produced 53% of total paid search clicks and 57% of
Google paid search clicks in Q1. Phone click share increased by 15 points from Q1 2015 to Q1 2016, while tablet click share is down by four points over the same period.
PLAs accounted for 43% of Google search ad clicks within the retail vertical, and 70% of non-brand clicks. PLA traffic from Google search partners was up 545% Y/Y, while PLA clicks on phones
were up 162% Y/Y.
- Yahoo Gemini produced 17% of the combined clicks across Bing and Yahoo’s two search platforms at the end of Q1, in line with its share the previous
quarter. Though originally launched as a mobile platform, 56% of Gemini clicks were on desktop in Q1.
Organic Search & Social
- Organic search visits were
down 7% Y/Y in Q1 as increased monetization of mobile results is pushing more traffic to paid listings. While mobile traffic share has been flat for organic search in the past year, it is up
10 points for paid search.
- Despite significantly ramping up mobile ad volume through additional inventory, Google’s share of mobile organic search visits increased from 87%
to 89% from Q1 2015 to Q1 2016 as it competitors saw larger declines in mobile.
- Overall, Google has gained one point of organic search visit share in the last year, as Yahoo
lost one point and Bing’s share was stable.
- Social media sites produced 3.1% of site visits in Q1, with Facebook accounting for 62% of all visits driven by social
Comparison Shopping Engines
- Connexity and the eBay Commerce Network commanded 96% of all comparison shopping engine (CSE) spending in Q1. This follows
Connexity’s acquisition of PriceGrabber in mid-2015 and the shuttering of Amazon Product Ads in Q4 2015.
- Connexity and the eBay Commerce Network drove just 8% and 5% as much
revenue for advertisers, respectively, as Google Shopping Ads (PLAs) did in Q1, among brands advertising across all three platforms.
- Spending on Facebook ads increased 38% Y/Y in Q1 2016, a slight deceleration from 44% growth the prior quarter. Average CPC was 21% lower Y/Y, similar to Q4 results.
Google Display Network accounted for 12% of total Google ad investment in Q1, down slightly from a year earlier as search ad spending has accelerated.
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